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Saturday, Feb 23, 2002

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Quick reforms in farm sector urged

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Mr K.K. Nohria, President, Assocham, and Mr Jayanth Bhuyan, Secretary-General, at a press conference in Chennai on Friday.

CHENNAI, Feb. 22

THE Associated Chambers of Commerce and Industry of India (Assocham) has called for carrying out urgent reforms in the agriculture sector. These include freeing crop pricing policy from controls and removing or relaxing export ceiling on commodities.

Briefing presspersons after a meeting of the managing committee of the Assocham here today, its President, Mr K.K. Nohria, said that the Government's role in agriculture should only be in terms of providing the farmers with better technology and means to improve productivity.

The Assocham would like the Government to increase public spending on physical expenditure to stimulate demand for basic and capital goods industry. Over the years, public expenditure on capital formation had come down while it had increased on the revenue account. This was not a healthy mix.

The chamber said Assocham wanted zero personal income-tax on an income up to Rs 75,000, a 10 per cent tax up to Rs one lakh and a 20 per cent tax up to Rs 2 lakh. The peak rate of 30 per cent could be levied on an income above Rs 2 lakh.

The measures that the Assocham wanted the Government to take included broadening the tax base, accelerating the disinvestment process. The Government could also think of exporting nearly two-thirds of the huge food grain stock it was holding.

Asked about the medium-term export strategy and the view that the rupee needed to be depreciated, Mr Nohria said that there could only be a marginal depreciation in the rupee. After all, the rupee was not too much over-valued, he said.

On disinvestment, the Assocham would like the Government, apart from strategic disinvestment, to sell some stake to the general public.

On the move to allow up to 49 per cent FDI in banks, Mr Nohria said the issue of ownership was not a critical one as employment would still be India. The quality of service offered to borrowers might improve. Given the savings rate of about 24 per cent, FDI was essential to achieve a 7-8 per cent growth.

During his interaction with officials from the Tamil Nadu Government, he had emphasised that the State should not be satisfied with being just a progressive State. Instead, it should aim to be a model State, for which it should benchmark itself with countries like Singapore rather than with other States in the country. The Government should strive to make Tamil Nadu the destination for healthcare and education, not just from within the country but globally too, he added.

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